Firefighter pension benefit changes
contained in the collective bargaining agreement between the City of
Lansing and International Association of Firefighters (IAFF) Local 421,
ratified May 19, 2014 are in the process of being incorporated into the
City ordinances. A public hearing will be held at the Monday, December 8
city council meeting.
I emailed a FOIA request to the city
attorney on November 19 asking for a copy of the new contract. In the
meantime, we can see some of the changes as reflected in proposed ordinance changes.
Those proposed changes are included in the
packet for the November 24 city council meeting. The changes are to
the Police and Fire Retirement System, and most apply to new
firefighters:
-
Minimum retirement age. New
firefighters - firefighters hired on or after May 19, 2014 - cannot
retire before age 50. Everyone else can still retire at any age with
25 years of service.
-
Limit on pension amount. The
pension of any firefighter who retires on or after October 1, 2014
is limited to 110% of base wage at the time of separation. The
ordinance defines base wage as base wage, which seems kind of
stupid. It also defines annual base salary as "the salary paid by
the city to a police officer or firefighter for 12 consecutive month
of credited service." It would make more sense to limit the pension
to 110% of annual base salary rather than 110% of base wage,
which is undefined, but what I would assume to be the hourly rate.
The current limit is 80% of final average compensation.
-
Reduced pension multiplier. The
pension multiplier for any firefighter hired on or after May 19,
2014 is 2.5%. For all others, the multiplier remains 3.2%.
-
Member contributions. For any
firefighter hired on or after May 19, 2014, the contribution to the
retirement system is 7.0% of compensation. The rate for other
firefighters increases from 9.08% to 10%.
For a pretty good description of current
Police and Fire Retirement System plan provisions, see page 12 of the
2012 actuarial valuation.
Here is how final average compensation is
defined in the current Police and Fire Retirement System ordinance
(Chapter 294, on the city clerk's website):
Final average compensation means
the monthly average of the member's final compensation that is
included in "included compensation," as defined in this subsection,
paid during the period of the member's 24 highest consecutive months
of credited service as a police officer,
or firefighter. If the member has less than 24 months of credited
service, the member's final average compensation shall be the
monthly average of the included compensation paid for his or her
total period of credited service. For a police officer
member, included compensation is defined as annual base salary,
overtime pay (including holiday pay), longevity, gun allowance,
clothing allowances, sick leave reimbursement (buy-back), shift
premium and retroactive pay (prorated by effective date). For a Police Supervisory
Division Unit member, the definition of included compensation also
includes compensatory time buy-back (up to a maximum of 160 hours),
provided that the compensatory time was earned in the same 24 months
on which final average compensation is based.
For a firefighter member, included compensation is defined as annual
base salary, overtime pay, acting pay, ambulance wage differential
pay, longevity, holiday pay, field training instructor pay and
retroactive pay (prorated by effective date).
Calculating annual base salary is tricky
for firefighters. For employees who work a regular 40 hour week, I
calculate it as hourly wage times 2080 (40 times 52 weeks). But for
firefighters in the Fire Suppression Division, I calculate it
by multiplying hourly rate by 2799.94 (53.845 hours per week times 52
weeks per year). All this is explained in a
story I wrote in January 2012. |